www.sun-sentinel.com By Sandra Hernandez Staff Writer Posted February 21 2003

A Venezuelan diplomat accused of helping funnel money to terrorists in Afghanistan is asking the FBI to investigate the man who made the allegations.

Walter Marquez, Venezuela's ambassador to India, met with an agent in Miami on Thursday to file a complaint, according to Judy Orihuela, a spokeswoman with the FBI.

Marquez is in the United States to respond to allegations made last month by a former presidential pilot who accused him and President Hugo Chávez of transferring $1 million to the Taliban and al Qaida shortly after the Sept. 11, 2001, attacks.

Juan Diaz Castillo made the accusations last month while in Miami, and said the money was disguised as humanitarian aid to Afghanistan. He claims Marquez helped funnel the money to Afghanistan.

The case underscores the growing role South Florida is playing in Venezuela's mounting political crisis. During the past month, key opposition leaders have attended rallies in Miami and dissident military officials such as Castillo have shown up in Florida to denounce alleged plots. Now Venezuelan government officials appear to be using the same tactic to plead their case before the international community on Miami's shores.

Marquez says Castillo is lying. He displayed letters and bank receipts during a news conference at the Venezuelan Consulate in Miami in an attempt to prove the government made legitimate contributions of $1 million to the United Nations Office of the High Commissioner for Refugees to be used for Afghan aid. He said an additional $1 million was given to the Indian government for an earthquake relief fund.

Castillo made the accusations after fleeing Venezuela in January, saying he feared for his family's safety. He sought asylum in the United States, but his whereabouts could not be determined Thursday night.

Chávez opponents in South Florida say the presence of government officials here is simply a public relations move.

"The government is pleading their case in Miami because it has the benefit of the English- and Spanish-speaking world," said Fransisco Gonzalez, head of the Venezuelan American Chamber of Commerce. "It is clear that Chávez has lost sympathy, and the standard line that [the opposition] is a bunch of crazy people and Chávez is the victim is being eroded by their own tactics."

Marquez said he was responding to the allegation here because of the current crisis in Venezuela. Marquez is also named in a wrongful death lawsuit filed by the watchdog group Judicial Watch. That group filed suit last month on behalf of the family of a woman killed in the Twin Towers attack.

"I have never received information or instructions to give money to Al Qaida," he said.

The accusation and Marquez's response comes at a time when Venezuela is still reeling from the two-month strike that brought the country's oil industry to a near standstill, paralyzed the economy and left dozens dead or injured. Venezuela has the world's largest oil reserves outside the Middle East.

The South American nation of 24 million was reeling again Thursday after a key opposition leader was taken into custody and dozens of others who supported the strike went into hiding fearing more arrests were imminent.

While Marquez declined to comment on the detentions, he acknowledged the current crisis is " a war, an undeclared war by both sides."

He added the solution must be political and include elections.

"The only way out of this current crisis is a political agreement. The government is not in a position to break the opposition nor is the opposition in a position to break the government," he said. "The government and the opposition are taking the country into a profound and worsening crisis. In the end, the government and the opposition will disappear some day, but the country will remain, and we have to fight for the survival of Venezuela."

Meanwhile, some members of South Florida's Venezuelan community said they fear the latest round of arrests will provoke a new exodus and further cripple the fragile economy.

"I don't think this latest action will do anything to stop the exodus because it is clear that there are going to be retaliations against the leaders of the strike," said Gonzalez, of the Venezuelan American chamber.

Others said the detentions will intensify Venezuelans' fears

"This is the worst message that could be sent out," said Magin Briceño, a Venezuelan member of the Weston Chamber of Commerce. "We were hoping that after the strike, the situation would ease a bit, but this seems to make the situation now worse. Everyday we receive dozens of calls from people there who want to know if we can help them."

Sandra Hernandez can be reached at shernandez@sun-sentinel.com or 954-385-7923.

www.miami.com Posted on Fri, Feb. 21, 2003 BY PHIL GUNSON Special to The Herald

CARACAS - Members of the political opposition Thursday condemned the arrest of one of its leaders, calling it arbitrary and illegal and charging President Hugo Chávez with stepping up plans to turn Venezuela into a Cuban-style totalitarian state.

Carlos Fernández, head of the businessmen's Fedecámaras alliance, was accused of treason and criminal conspiracy. He remained in jail Thursday after being arrested at gunpoint as he emerged from a restaurant the night before. Carlos Ortega, leader of the organized labor movement and a key opposition figure, went into hiding after a judge issued an arrest warrant against him.

Leaders of the opposition umbrella group, the Democratic Coordinator, declared a 15-minute work stoppage at midday and a protest march that interrupted traffic on the freeway through Caracas.

The moves against two of Chávez's most prominent critics came only days after Chávez threatened to close down Venezuela's largest TV networks, imposed strict currency exchange controls that are likely to hurt opposition media, and fired nearly 10,000 striking workers from the state oil company.

AT HEADQUARTERS

Fernández was being held at the headquarters of the Intelligence and Preventive Services Directorate (DISIP), variously referred to as the government's secret police or spy agency.

''We demand that the government guarantee his safety,'' said Albis Muñoz, the Fedecámaras vice president, adding that Fernández had been ``virtually kidnapped.''

U.S. State Department spokesman Richard Boucher said officials in Washington were worried the arrest could hinder efforts to end the stalemate between political rivals.

''We fear the act could undermine the dialogue process,'' Boucher said. ``This increases our concerns about human rights in Venezuela.''

''This is an escalation of violence by the government, which has arrived at the extreme of repression,'' said Carlos Feijoo, a retired oil worker at an anti-Chávez demonstration on Thursday. ``He wants to copy Fidel [Castro].''

Fernández was one of three main leaders of the two-month-long strike aimed at ousting Chávez that began on Dec. 2. Chávez has accused the leaders of the strike -- which remains in effect in the oil industry -- of sabotage and of seeking to overthrow his government by force.

However, the accusations against Fernández stem from an investigation into last April's abortive coup, led by the then-president of Fedecámaras, Pedro Carmona.

During his regular, Sunday morning TV and radio program this week, the president had exhorted judges and public prosecutors to take action against opposition leaders, referring to them as ``coup-plotters.''

Since the end of the non-oil part of the strike, an emboldened Chávez has several times announced a ''revolutionary offensive'' against the opposition.

In a speech Thursday, he said he had ''gone to bed with a smile,'' on hearing the news of Fernández's arrest. ''It seems there are brave judges emerging now,'' Chávez said.

After Fernández's arrest, Ortega, president of the main trade union confederation, the CTV, went into hiding, according to fellow CTV leader Manuel Cova.

Speaking to a radio station, Cova said Ortega was in hiding because ``we cannot allow the government to humiliate him . . . as of now the rule of law does not exist in Venezuela, and neither the life of Carlos Fernández nor that of Carlos Ortega can be guaranteed.''

The judge who issued the arrest warrant for Fernández, Maikel José Moreno, listed a series of accusations against him, including treason, rebellion and criminal conspiracy. Moreno was only recently appointed a judge, after acting as the defense lawyer for one of the pro-government gunmen involved in the firefight that preceded the April coup.

ARMED MEN

According to spokesmen for Fedecámaras, the armed men who detained the business leader presented neither identification nor a warrant.

They fired into the air to disperse a small crowd before arresting Fernández.

Ombudsman German Mundarain -- regarded by the opposition as a government sympathizer -- said police ''wore vests identifying them as DISIP'' and told the business leader he was under arrest.

Sonia Fernández, the business leader's wife, said she was able to speak to him, that he was physically unharmed and was talking with lawyers.

Lawyer Jesus Ramon Quintero said under the country's new penal code, Fernández could be held for 45 days before being formally charged.

''This is the first time a major opposition figure has been treated this way,'' Quintero said, adding that there were ``plenty of indications that this is political.''

'The oil workers' leaders should prepare themselves,'' he warned. ``Next week they could all be arrested.''

The latest moves come just days after the torture and murder, in circumstances that have yet to be clarified, of three soldiers and a young woman involved in a four-month-old anti-government protest by military officers.

This report was supplemented with material from Herald wire services.

www.cjonline.com By Brad Foss The Associated Press

The middle of winter looks more like the heart of summer at gas stations nationwide, as fuel prices surge past $2 a gallon in some places and motorists grumble about being gouged.

Political instability in Venezuela and the prospect of war in Iraq are triggering price increases that normally don't kick in until the peak driving season. And experts warn prices could shoot up even more as the political situation and the weather heat up.

The average retail price for a gallon of regular unleaded, $1.66, has risen 56 cents since the beginning of the year.

But because wholesale gas prices have increased just 14 cents in the same period of time, some consumers suspect oil companies are trying to cash in on market uncertainties.

"I think it's just an excuse to raise prices," said Corina Alba, 22, of Anaheim, Calif.

Sen. Charles Schumer, D-N.Y., called on the Federal Trade Commission this week to investigate industry practices. In a letter to FTC chairman Timothy Muris, the senator said, "It appears as if price gouging is taking place across the country."

The American Automobile Association supports Schumer's request but stopped short of using the word gouging.

"We feel that most of the increase has been due to fear and speculation, rather than any change in the supply or demand for crude oil or gasoline," AAA spokesman Jeff Sunstrom said.

Regardless of the reasons, Sunstrom said today's high prices could be a harbinger of even costlier fuel by the end of April.

Tom Kloza, director of Oil Price Information Service, a Lakewood, N.J., publisher of industry data, said the imports lost after Venezuela's oil workers went on strike haven't been adequately replaced and that could be a problem when the weather heats up and demand rises.

Venezuela was the world's fifth-largest petroleum exporter and a major U.S. supplier before a general strike that began Dec. 2, seeking the ouster of President Hugo Chavez. The strike ended for all sectors except the oil industry Feb. 4.

Unrest flared again Thursday in the capital of Caracas, where thousands of people protested the arrest of a strike leader.

Gas prices typically rise during spring, when refiners shift from winter- to summer-grade fuel. The switch to cleaner-burning gas requires shutting down equipment, scrubbing it clean and starting it up all over again -- a process that causes supplies to contract and prices to move higher even under the best conditions.

The effect of this switch already has been magnified by the possibility of a U.S.-led invasion of Iraq, analysts said.

The petroleum industry contends gasoline prices are higher mainly because of traders' fears of supply disruptions in the event of a war in Iraq and the impact of the Venezuelan oil strike.

"The fundamental thing is that crude prices have gone up dramatically," said John Felmy, chief economist at the American Petroleum Institute.

About 40 percent of the retail cost of gasoline is attributed to the price of crude oil, which has risen 19 percent since the start of the year to $36.79 per barrel.

Oil prices could reach unprecedented levels -- perhaps as high as $50 a barrel -- if U.S.-led forces attack Iraq, Malaysian Prime Minister Mahathir Mohamad warned Thursday in an interview with The Associated Press. Malaysia is an oil producer but not a member of the Organization of Petroleum Exporting Countries, or OPEC.

Gas station owners say they are frustrated by accusations of profiteering and insist they aren't to blame. They say suppliers have been raising their "rack" prices for weeks and that station owners are merely passing along those increases to customers.

"I realize that the price of a barrel of oil has gone up tremendously, but the way that rack prices have gone up for the last two weeks is just not right," said Richard Loeber, owner of a gas station in Union Beach, N.J.

Loeber said his supplier has raised the rack price by 16 cents a gallon in less than three weeks and that he has maintained his 8-cent-per-gallon margin all along.

"People know they're getting gouged, but believe me, it's not from the dealers," Loeber said.

Last Modified: 1:15 a.m. - 2/20/2003

www.timesdispatch.com THE ASSOCIATED PRESS Feb 21, 2003

The middle of winter feels more like the heart of summer at gasoline stations nationwide, as fuel prices surge toward or past $2 a gallon and motorists grumble about being gouged.

When a gallon of gasoline costs more than a cup of gourmet coffee around the July Fourth holiday, drivers chalk it up to industry greed during the peak driving season.

But this winter consumers and others are accusing oil companies of taking advantage of the prospect of war in Iraq - an allegation the industry brushes aside as a conspiracy theory.

Gas station owners tell a more complicated story, explaining that today's high pump prices are partly the result of avarice, but not their own.

The average U.S. retail price of regular unleaded has risen 56 cents since the beginning of the year to $1.66 a gallon. Wholesale gas prices have increased 14 cents in the same period.

(In the lower Atlantic states, including Virginia, the average price of regu- lar unleaded gasoline at the pump was $1.595 in the week that ended Monday. That's up 20 cents from the beginning of the year, according to Department of Energy figures.)

While suppliers tack on costs for additives and transportation, the disparity is the source of ire for much of the public.

"This is ridiculous," said 20-year-old Jose Quiles, a tanning salon manager in Dallas who paid about $10 yesterday for a little more than 6 gallons of gas.

Earlier in the week, Sen. Charles E. Schumer, D-N.Y., called on the Federal Trade Commission to start an investigation of industry practices. "It appears as if price gouging is taking place across the country," Schumer said in a letter to FTC Chairman Timothy Muris.

The AAA supports Schumer's request. The travel company said it is also concerned about why prices have gone up so much in such a short period of time, though a spokesman stopped short of using the term gouging.

"We feel that most of the increase has been due to fear and speculation, rather than any change in the supply or demand for crude oil or gasoline," said Jeff Sunstrom, a spokesman for AAA. He worries that today's prices could be a harbinger of even costlier fuel before May.

"Watch out between April 15 and May 31," said Tom Kloza, director of Oil Price Information Service, a Lakewood, N.J., publisher of industry data. Kloza said the imports lost after Venezuela's oil workers went on strike in December have not been adequately replaced and that could be a problem when the weather heats up and demand rises.

Gasoline prices typically rise in the spring, when refiners shift from winterto summer-grade fuel. The switch to cleaner-burning gas requires shutting down equipment, scrubbing it clean and restarting it - a process that causes supplies to shrink and prices to rise even under the best conditions.

The public face of the industry - gas station owners - are frustrated by accusations of profiteering, but they insist they are not to blame. They say suppliers have been steadily upping their "rack" prices for weeks and that station owners are merely passing along the changes without any benefit to their bottom lines.

"I realize that the price of a barrel of oil has gone up tremendously, but the way that rack prices have gone up for the last two weeks is just not right," said Richard Loeber, owner of a Hess station in Union Beach, N.J. About 40 percent of the retail cost of gasoline is attributed to the price of crude oil, which has risen 19 percent since the start of the year to $36.79 per barrel.

Loeber said that Hess has raised the rack price by 16 cents a gallon in less than three weeks and that he has maintained his 8-cent-per-gallon margin.

Loeber and other retailers attribute the rapid increases to "zone pricing," a phenomenon in which suppliers value their product based on the highest level a particular market will bear. For example, if their customers' rivals are getting a nickel more per gallon at the pump, they will set their rack price accordingly, even if the supplier's costs have not increased.

"People know they're getting gouged, but believe me, it's not from the dealers," Loeber said.

The National Association of Convenience Stores, which represents about 100,000 sellers of gasoline, says its members are especially unhappy about the high gas prices because they detract from sales of soda and chips.

"Our members make more off a 12-ounce coffee than they do off a 12-gallon fill-up," said Jeff Lenard, the group's spokesman.

For its part, the petroleum industry fends off critics by pointing to higher oil prices. The surge has mainly been attributed to traders' fears of supply disruptions in the event of a war in Iraq and the impact of the Venezuelan oil strike.

www.timesleader.com Posted on Fri, Feb. 21, 2003 JAMES ANDERSON Associated Press

CARACAS, Venezuela - President Hugo Chavez demanded 20-year prison terms Friday for two prominent opponents who directed a nationwide strike that devastated Venezuela's oil-based economy.

Carlos Fernandez, head of Venezuela's largest business chamber, and Carlos Ortega, leader of its biggest labor confederation, are charged with treason and other crimes for the two-month strike, which cost more than $4 billion.

Fernandez was arrested by secret police Wednesday and hauled into court Friday. Ortega went into hiding when a judge issued an arrest warrant.

"These oligarchs believed that they were untouchable. There are no untouchables in Venezuela. A criminal is a criminal," Chavez thundered during a ceremony handing land titles to peasants in Trujillo state.

He demanded a 20-year term for Fernandez, president of Fedecamaras, and for Ortega, of the Venezuelan Workers Confederation, for allegedly sabotaging the oil industry, inciting civil disobedience "and trampling the human rights of the Venezuelan people."

The treason charge carries a 20- to 26-year prison term.

Oil is Venezuela's strategic industry, and its exports were the fifth-largest in the world before the strike began Dec. 2. The strike ended Feb. 4, but Chavez's government is battling a continuing walkout in the oil industry.

Citing nationwide hardship caused by gasoline shortages, Chavez condemned Fernandez and Ortega as "terrorists" who failed to topple his government - both during a brief April coup and this winter.

The tempestuous president also had a message for foreign critics. The United States, Organization of American States and other entities voiced concern that Venezuela's crisis is escalating.

"I want to remind all the governments of the world that Venezuela is a sovereign country! We are nobody's colony!" Chavez shouted.

Fernandez's arrest fueled speculation Chavez has begun a crackdown on his opponents.

Chavez won't allow strikers access to U.S. dollars under a new foreign exchange system, and he has threatened to shut down broadcast media for inciting rebellion. He also has warned he will seize private businesses and property to deliver gasoline, food and other basics.

Ruling party leader Willian Lara told the state Venpres news agency that the hundreds of strike organizers should be prosecuted "for crimes against the republic."

The labor confederation, meanwhile, said it wasn't planning another strike to protest Fernandez's arrest.

The OAS, the United Nations and the Carter Center, run by former President Jimmy Carter, have sponsored three months of talks to seek an electoral solution to Venezuela's crisis. The future of those talks was in doubt after Fernandez's arrest.

Venezuela's opposition wants early elections and collected more than 4 million signatures to back its demand. The government dismisses the petition drive; Venezuela's elections authority is in shambles.

Chavez is a former paratrooper who was elected in 1998 and re-elected in 2000 to a six-year term. He vows to distribute Venezuela's oil riches to the poor. Critics accuse him of imposing an authoritarian state and driving the economy into the ground.